George Osborne announces fresh cuts to education budgets

Chancellor George Osborne has announced almost a billion pounds of in-year spending cuts to the budgets of the Department for Education and the Department for Business, Innovation and Skills.

Mr Osborne said today that the DfE and BIS would each make an extra £450m of savings in the 2015-16 financial year, totalling £900m in reductions.

Few details of the new savings have been announced, but a statement from the Treasury said there would be “savings in higher education and further education budgets in BIS, and savings in the administration of arms lengths bodies in the Department for Education”.

It said the DfE savings would be from non-schools spending, adding that savings would come from Whitehall efficiencies and from “tightly managing departmental budgets in-year, so that instead of spending up to budget, departments deliver underspends”.

The spending cuts are part of a series of measures to bring about £4.5bn of deficit reduction this year, Mr Osborne said. This includes £3bn in Whitehall savings, including from the DfE and BIS, and an estimated £1.5bn from the sale of the government’s remaining shares in the Royal Mail.

A spokesman for the DfE said: “These savings will come from a variety of measures including expected departmental underspends in demand-led budgets, efficiencies and some small budgetary reductions.”

A BIS spokeswoman insisted that priority areas such as apprenticeships would be protected, and added that a “significant” proportion of the savings would be made through “surrendering underspends, making efficiencies and reducing lower value spend”.

“It is right that as the nation tightens its belt on public spending, the FE sector plays its part in ensuring value for money for taxpayers by finding savings,” she added. “We will be asking Skills Funding Agency for advice on how savings can best be achieved in line with ministers priorities around apprenticeships and priority FE participation funding, and whilst safeguarding the resilience of the sector.”

David Hughes, chief executive of adult learning body Niace, said the cuts would increase the pressure on the FE sector. “We have already seen a million lost learning opportunities in the last five years,” he said. “It’s hard to see how this in-year cut will not reduce those opportunities even further. For hard-working people, their chances of getting the skills to improve their career prospects are even further away.

“We need to see a secure skills settlement from the government so that businesses can have the confidence to invest in training and upskilling their staff. We will be closely examining the details of these savings when they are made available.”